Our view: Stimulus for the economy

President-elect Barack Obama has been in Washington lining up support for an economic stimulus package that could top $800 billion.

Obama’s transition has been relatively smooth and he appears ready to take quick action when it comes to the economy. Whether the stimulus package will be effective remains to be seen. But, it is encouraging to see the Obama team positioning itself in such a way. There simply are too many pressing issues for the new administration to have a settling in period. It has to be governing on Jan. 20.

“I expect to be able to sign a bill shortly after taking office,” Obama said. “By the end of January or the first of February.”

That is an ambitious time frame, but it is appropriate. If the goal is to stimulate the economy, time is of the essence. The sooner such a package can gain approval, the sooner it can be implemented.

Obama’s stimulus package would include up to $300 billion in tax cuts, including $500 for most workers and $1,000 for couples. There also would be $100 billion for businesses. New federal spending would account for the remaining $400 billion – primarily public works projects.

The plan would allow businesses that lost money this year to take a credit against profits from five years ago. Currently, only two years are allowed. Also, the package could include a one year tax credit to companies that hire new workers.

Essentially, the package would take a three-pronged approach: It would put cash in the pockets of individuals; provide tax breaks and incentives for businesses; and create jobs directly through government-funded infrastructure projects such as building roads and schools.

The package should include stern oversight for how the government spending portion is administered. Overall, however, we believe that there is plenty to like in the stimulus package Obama plans to roll out.